Large companies trading tolerance for risk

Sometimes, business decisions are clear cut. “Buy low/sell high” is almost universally a good idea. But often, legal decisions in the workplace are murkey, and companies often face a difficult decision when the opportunity to take a moral stance comes into conflict with the bottom line.

Such is the case with the Employment Non-Discrimination Act (ENDA). Companies that back the proposed legislation can send a clear message about issues of sexual identity. But if the act passes, it raises the risk of lawsuits that businesses could face.

ENDA is a piece of legislation that would extend federal civil rights protection to a whole new category of individuals. It would protect sexual orientation and gender identity in the same way that race, color, religion, sex, national origin and disability are protected under Title VII of the Civil Rights Act of 1964.

A group that advocates for lesbian, gay, bisexual and transgender rights, the Human Rights Campaign, supports ENDA, and has assembled a list of companies that have signed letters affirming their support for the act. This coalition of companies includes Bank of America, Coca-Cola, Bristol-Meyers Squibb, Procter & Gamble and more than 100 other large employers, including recent supporter General Electric.

By joining the coalition, these companies are making a social statement, affirming their commitment to non-discriminatory policies and expanding the concept of workplace diversity. But, from a legal standpoint, ENDA, if passed, would increase the risk that employers could face from litigation.

Many of the companies in the coalition contend that ENDA aligns closely with policies that are already in place. As the chief diversity officer of GE told The Wall Street Journal, “[the] Coalition is endorsing non-discrimination protections that are consistent with our existing workplace policies. We believe the group’s work in advocating for these protections communicates our own beliefs, and benefits the company by retaining talent, supporting our recruiting efforts and marketing our consumer products.”

But attorneys caution that companies should not fool themselves into thinking that existing company policies prohibiting discrimination will minimize risk of litigation if ENDA passes.

“Employees violate employer policies every single day and it’s those diversions from policy that frequently will cause a problem for the employer,” Monica Minkel, senior vice president for executive protection at Poms & Associates Insurance Brokers told the Journal. “I think the companies that are backing ENDA believe they’re doing the right thing and believe this legislation is probably close in line with their own internal policies. However, there will be claims from it, because this does give gay Americans an opportunity to pursue litigation.”

Still, ENDA gives companies a clear opportunity to take a stand. Knowing that support of the bill will increase the potential of lawsuits, businesses that truly believe in workplace diversity can show that they can act on this belief even if it opens them up to more risk. That in and of itself is a bold statement, demonstrating that there is more to business than just the bottom line. People are important, too.

Senior Editor and Community Manager

Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....